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Whistleblowers, Be Skeptical When You Hear the Phrase “Frivolous Lawsuits”

The term “frivolous lawsuits” is thrown around a lot today, especially with regard to whistleblower cases. It is also used by tort reform advocates who promise that the creation of new legislation would reduce the number of unnecessary lawsuits filed each year. However, if you are thinking about filing a claim as a whistleblower, you should not let this term frighten you out of doing the right thing. If you have evidence of fraud, you can still file a whistleblower claim successfully.

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By definition, a frivolous lawsuit is one that has no true legal basis. These lawsuits are filed without sufficient evidence or cause, in hopes of winning a large monetary reward. Proponents of tort reform often use the argument that juries sometimes unfairly reward filers of frivolous lawsuits, which encourages more people to file them. These lawsuits are also said to put an unnecessary strain on the court system.

Proponents of tort reform turn to extreme examples of frivolous lawsuits in order to support their cause. However, several mechanisms are already in place to discourage and/or prevent the filing of frivolous lawsuits. For example, many lawyers who represent clients in the types of lawsuits that are usually termed “frivolous” offer their services on a contingent-fee basis. This fee structure prevents the filing of lawsuits where a win is unlikely, as the attorney won’t agree to represent the client when sufficient evidence isn’t available. United States courts also use a tool known as “summary judgment” to prevent frivolous lawsuits from moving forward. The purpose of summary judgment is to determine whether enough evidence exists to warrant an actual trial. If the court determines that the evidence is lacking, the lawsuit is dismissed.

Although frivolous lawsuits do exist, this term is often applied unfairly. When used with regard to whistleblower cases, it is meant to be dismissive, minimizing the importance of legal action that is often significant.

Understanding Whistleblower Claims

Under the False Claims Act, anyone who makes fraudulent claims to the U.S. government is held liable for the government’s losses. This act provides protection for whistleblowers, who are individuals that provide information about these false claims and pursue action against the company guilty of fraud. The act prohibits companies from retaliating against individuals who have acted as whistleblowers. If retaliation does occur, the company must provide whatever compensation is necessary to resolve all of the effects of retaliation. This may include reinstatement of the individual’s job, as well as compensation for litigation costs, attorney fees and all other related expenses. Whistleblowers are eligible to receive an award of up to 30 percent of the fines and damages recovered by the government.

In order to file a valid claim as a whistleblower, you must begin by providing the information to the government. You must also be the original source of this information. The information you provide must not be disclosed publicly before the lawsuit’s filing, and the lawsuit must be filed under seal and kept confidential.

Whistleblowers and Frivolous Lawsuits

Recently, the United States Department of Justice issued a memo focused on limiting “meritless” whistleblower lawsuits. This memo instructed attorneys in the DOJ to consider seeking dismissal when the government decides not to support a frivolous whistleblower claim. This memo may result in a lower number of whistleblower claims moving forward.

When a whistleblower files a successful claim, he or she can recover a portion of any settlement awarded in the case. According to Reuters, False Claims Act settlements and judgments in cases initiated by whistleblowers in 2017 totaled $3.4 billion. The whistleblowers themselves received approximately $393 million for their efforts during 2017.

When a whistleblower claim is filed, the U.S. Department of Justice can decide whether or not to join the lawsuit. Although the number of claims filed has increased in recent years, the rate at which the DOJ joins these lawsuits has not. In the most recent memo, the DOJ was referring specifically to those claims they choose not to join.

Advice for Whistleblowers

Even in light of the memo and warnings about so-called “frivolous lawsuits,” whistleblowers should not be afraid to stand against fraudulent activity. Even if the U.S. Department of Justice chooses not to join a lawsuit, the lawsuit may still be significant. Whistleblowers should not allow the contents of the DOJ memo to discourage them from taking action when they become aware of a company’s committing fraud. As long as the claim meets the requirements of the False Claims Act, it is a valid claim, regardless of whether the Department joins it.

If you have evidence of any fraudulent activity that violates the provisions of the False Claims Act, you need to act quickly.

To file a strong whistleblower claim that has the best chance of success, you will need to present specific, concrete evidence of the fraud. Although you don’t need to have actually witnessed the fraud, simple suspicion won’t be enough. If possible, collect written evidence to support your claim.

Whistleblowers can report evidence of fraud to the government, internally within the company, or to both. However, you won’t be eligible for whistleblower rewards unless you report the activity to the government.

Contact an Attorney

Filing a whistleblower claim can be challenging. In many cases, whistleblowers aren’t sure how they should proceed when they become aware of fraudulent activity. If you have evidence of fraudulent activity, the best thing you can do is consult an attorney who has experience with whistleblower claims. Your attorney will be able to help you decide how to proceed in order to protect your rights and ensure that your claim is as strong as possible.

If you are considering filing a whistleblower claim, you need to contact an attorney who has experience with these cases. Please call the Louthian Law Firm today at 803-454-1200 to make an appointment or to learn more about the process of filing a whistleblower claim. You can also get in touch with us by filling out our online contact form.

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